Employees in the public sector have lost something they used to count on: faith that their retirement income prospects were good.
So says a new report from the Center for State and Local Government Excellence and the TIAA-CREF Institute, which found that only 18 percent of full-time public sector employees are very confident about money for retirement.
Of course, that train left the station a while ago; even in 2012 only 21 percent were very confident about their retirement prospects. Worries about retiree health care costs, future benefits from Social Security and Medicare, and their own saving and investing for retirement are high on these folks' list of concerns.
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K–12 teachers were among those losing faith most sharply; there was a change of 7 percentage points from very confident to somewhat confident about their prospects for retirement income.
Only 39 percent of those polled said they are very confident their benefits will be there when they need them.
"Fewer local and state governments offer retiree health care and public employers also are shifting more health costs to employees and retirees," said Joshua Franzel, Center for State and Local Government Excellence vice president of research and coauthor of the report.
"This reality has reduced public workers' confidence in these benefits and raises new questions about how much they need to save for health expenses in retirement. In such an environment, it is important for all state and local workers to take advantage of financial education and planning resources as well as available savings opportunities."
Other findings include the fact that overall, state and local employees would like to retire at age 61, but don't expect to do so until they're 64; half expect to have to find another paying job during retirement. And 20 percent of public sector workers have found in the past year that they will have to change their expected retirement date; 76 percent of these are now planning to work longer and retire later.
Reasons cited for the change were not being able to afford to retire (30 percent); the cost of living being higher in retirement than expected (21 percent); health care costs (18 percent); expectations that Social Security would be reduced (15 percent); a change in the age at which they can collect their pension or Social Security (12 percent); or a change in their employment situation (10 percent).
Also read: Public pensions show biggest gain in 3 years
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